Exam 12: Consolidation: Non-Controlling Interest

Non-controlling interests in the equity of a subsidiary at the date of acquisition are reflected in Step 1 of the NCI allocation process.

Where the NCI is measured at fair value at acquisition date, which of the following methods is being used?

A consolidated statement of comprehensive income discloses the non-controlling interest as:

If a subsidiary is not wholly owned by the parent there are two ownership interests which are known as the:

The NCI share of different categories of equity is required to be separately disclosed on the face of the consolidated statement of financial position.

When presenting a consolidated statement of comprehensive income, the non-controlling interest is shown as:

Where a subsidiary is partly owned by a parent and an NCI, any goodwill arising in the acquisition analysis is required to be allocated between that attributable to the parent and that attributable to the NCI.

Fisher Limited acquired 75% of the share capital and reserves of Man Limited for $150 000. The equity of Man Limited consisted of share capital of $100 000 and reserves of $60 000. All assets and liabilities were recorded at fair value except plant and equipment which were recorded at $10 000 below fair value. The company tax rate was 30%. The partial goodwill method is adopted by the group. The amount of goodwill acquired by Fisher Limited in this business combination was:

Consequential depreciation adjustments in relation to assets that were the subject of an upward business combination valuation adjustment must be taken into account when calculating the NCI share of post-acquisition movements in the subsidiary's equity.

AASB 12/IFRS 12 Disclosure of Interests in Other Entities requires disclosure of which of the following for each subsidiary that has a non-controlling interest?

Which of the following statements is incorrect?

A non-controlling interest in the net assets of a subsidiary consists of the non-controlling interest's share at the date of the business combination:

Beach Limited is a subsidiary of Golden Limited. When Golden acquired its 70% interest in Beach, the retained earnings of Beach Limited were $40 000. At the beginning of the current period, Beach Limited's retained earnings had increased to $100 000. Beach also earned profit of $20 000 during the current period. The NCI's share of the equity of Beach Limited at reporting date is:

Wendy Limited paid $120 000 for 75% of Yum Limited. At the date of acquisition Yum Limited had equity as follows: -share capital of $100 000 -retained earnings of $50 000 -other reserves of $30 000. All of Yum Limited's assets and liabilities were recorded at fair value. The fair value of identifiable net assets acquired by Wendy Limited amounted to:

Where a subsidiary is partly owned by a parent and an NCI, both the BCVR entries and the pre-acquisition entries are adjusted to reflect only the parent's share of the subsidiary's equity balances.

When presenting a consolidated statement of financial position, the non-controlling interest is:

The entry to reflect the NCI share of acquisition date never changes.

Happy Ltd holds a 60% interest in Valley Ltd. On 1 July 2018 Valley Ltd sold a depreciable non-current asset to Happy Ltd at a profit before tax of $10 000. The remaining useful life of the asset at the date of sale was 4 years and the tax rate is 30%. The impact of the above on the NCI share of profit for the year ended 30 June 2019 is:

A non-controlling interest is entitled to a share of which of the following items? I Equity of the group entity at acquisition date II Current period profit or loss of the subsidiary entity III Changes in equity of the subsidiary between acquisition date and the beginning of the financial period IV Equity of the subsidiary at acquisition date

The NCI is unaffected by the existence of any gain on bargain purchase.